The Electronic Payments Network (EPN) announced that its market share of originated ACH (automated clearing house) payments has increased from five percent to twenty-two percent during the last twelve months, and the total transaction volume originated and received by its members increased by one hundred and twenty-eight percent.
Twenty-three financial institutions moved some or all of their ACH volume to EPN, contributing significantly to the more than one billion ACH transactions processed by EPN in 2001. EPN’s advanced technology, outstanding service and standard-setting system reliability were all factors in the decision to switch.
“Robust functionality that makes a major contribution to value-added services offered to customers by banks and other financial institutions is very compelling,” said George Thomas, President of the Electronic Payments Network. “For the last several years we have approached our member banks and asked them what ACH capabilities they needed to stay at the cutting-edge. Our homework is starting to pay off,” said Thomas, “with innovative functionality unavailable on other payment systems.”
Financial institutions that converted ACH volume from the Federal Reserve Bank to EPN’s private-sector ACH system include: BB&T, Bank of America, Bank One, Carolina First Bank, Citrus Bank, First Liberty Bank and Trust Company, First Union, Fort Lee Federal Savings Bank, Mellon Financial Services, PNC Bank, Troy Commercial Bank, and Wachovia. Eleven other financial institutions also moved their volume during 2001. Additional banks expected to transition to EPN over this year include: ABN AMRO, Comerica Inc., Key Bank, Sun Trust, U.S. Bancorp and Wells Fargo.
Most of the current interest in EPN is for strategic reasons such as the recent announcements regarding enhanced ACH functionality and B2B commerce. There is tremendous interest in the financial community for a highly innovative, private-sector alternative to the Fed that can quickly incorporate innovations that add high-value enhancements to the ACH network.
The new enhancements, to be rolled out this year, include capabilities that will eliminate many of the barriers that hinder the use of electronic payments and will facilitate the automation of end-to-end payment processing while allowing financial institutions to leverage the current ACH infrastructure. One key feature is a Universal Payment Identification Code (UPIC) that protects against fraud and makes initiating payments easier. The result is a market-leading technology that is both tested and reliable, and that adds the vital missing links in the e-commerce financial chain.
“We think ACH is making a move away from simply a commodity business and will offer banks new opportunities to bring higher value to customers,” said Jeffrey Neubert, President and CEO, New York Clearing House. “The Electronic Payments Network has always been the industry leader in bringing new innovations to the ACH.”
“End-to-end or straight through payments processing is a major, long-standing goal for the business customers of all of these financial institutions,” said Frank Sardina, Director of Products and Services at EPN. “We are working with our members to provide the quickest path to add the functionality and necessary capabilities that will help their customers achieve that goal, and we are very pleased with the enthusiastic response that we have received from the financial community about this enhancement to our ACH product.”
EPN owner banks already participating include: BB&T, Bank of America, Bank One, The Bank of New York, Citibank, N.A., Deutsche Bank, First Union, Fleet National Bank, HSBC Bank USA and JPMorgan Chase Bank.